William Blair Coughs Up $4.5 Million In SEC Settlement

Following a Securities and Exchange Commission investigation of a four-year span of fund management, William Blair & Company agreed this week to pay $4.5 million to settle claims of improper fund distribution.

The SEC accused William Blair in an earlier administrative order of blowing about $1.25 million in shareholder assets to support firm marketing, as well as failing to disclose client fees for and appropriation of funds to administrative services.

The firm, which manages $13 billion over 22 mutual funds, subsequently repaid all investors with interest.

"When the firm became aware of the errors, we promptly reimbursed the funds with interest, confirmed that no shareholders were harmed and cooperated fully with the SEC throughout the entire process," management said in a statement, adding that it has also improved internal systems.

The controversy comes at a time of apparent reorganization, as William Blair made cuts to its sell-side personnel this January for only the second time in history. The first occurred in the midst of the 2007-2008 financial crisis.